A: Financial management

A: Financial management

1. Financial management is concerned with managing an organization's assets, liabilities, revenues, profitability and cash flow.

2. Financial management invloves identifying the financial objectives of an organisations and ensuring that these objectives are achieved

3. Inorder to achieve the financial objectives the manager makes decisions in the key areas

   • Dividend Decision
     • Returns from the investment projects are
       • ploughed back into the treasury for funding future growth
       • Paid out to shareholders as dividends
   • Investment decison
     • where to invest or De - Invest ?
   • Financial Decision
     • From where to source for the Investment needs ? or not to source ?
       • Companies Raise capital from
         • Equity Shares
         • Debt Financing

4. CASE 1

   • Company is thinking of increasing the dividends
     • Dividend Decision
     • This will reduce the cash from treasury and triggers the need for further external finance for
       • Investing in long term projects
         • Investment decison
       • Financial Decision
       • either achieved through reducing the dividends
         • Dividend Decision